New lending and mortgage insurer’s guidelines have been recently announced in regards to condo conversions. Here is a list of documentation required up front by the lenders before the mortgage funds can be advanced.
1) The lenders and insurers need to know the actual upgrades performed to the building. An Engineer’s Report or Certificate of Completion ensures there are no structural issues with the building. This will show that construction is complete because the lender will not fund the construction costs on a conversion.
2) The title of the units must have separately registered titles. Sometimes developers will try to sell the units before the condo has been approved and there are no separate registered titles. This is not acceptable and a separate title must be available for the mortgage charge. The appraiser will comment on the legal description of the property or if there is no title.
3) The lenders and insurers will require a Certificate of Incorporation to show that a condo corp. exists, and is in place to handle any property issues that may arise.
4) The lenders and insurers will also need to address the condition of the building and future maintenance. For this, a Reserve Fund Study will be required. Since many conversions are older apartment buildings this will show us the current condition of the building and what maintenance will be over the next fifteen to twenty years. The Reserve Fund Study also outlines the amount of condo fees that should be paid and if there will be any immediate cash needs.
5) Condo financials, bylaws and proposed budgets are also required by the lenders and insurers to approve a condo conversion.
Therefore, for mortgages required for condo conversions, in addition to the regular mortgage approval requirements please provide the additional documentation mentioned up front to avoid any delays in mortgage funding or the deal falling through.
If you have any further questions in regards to condo conversions please contact us at your convenience.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
No comments:
Post a Comment